It’s been a rough couple of years for GameStop, and it looks like it’s only going to get worse. Recently, during an earnings call for its first fiscal quarter, GameStop shared that it’s shares have plummeted. How much have the shares fallen? Well, they are currently struggling to hit $5. As a result, the company’s share price is the lowest it has been since since 2003, back when it was still a part of Barnes & Noble.
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For the quarter, GameStop’s revenue was down 13.3 percent, and it wasn’t doing well going into the quarter. It still netted a profit, but it came in substantially lower than anticipated by analysts and lower than this time last year. That said, GameStop opted not to change its full-year guidance.
One department where GameStop especially saw a loss was in new hardware sales, which were down 35 percent. The Nintendo Switch’s sales were up, but that’s about it. Of course, with a new console generation around the corner, it will see growth in this department, but right now the aging PS4 and Xbox One are hurting it.
Beyond hardware, everything else was also down, except collectibles, which was up 10.5 percent year-over-year. Apparently, people still really love Funko Pops.
To save money, GameStop revealed it is eliminating its practice of distributing quarterly dividends to shareholders. This will apparently save it roughly $157 million, which is a healthy amount of money, but not substantial when dealing with a company the size of GameStop.
Again, with a new console generation around the corner, better times may be ahead for GameStop, but at this point it seems the writing is on the wall. Unless the retailer does something to drastically change its business, it’s going to be increasing trouble. The digital market is growing bigger and bigger each year, and so a lot of brick and mortar retailers are in trouble. Everything is moving online, and a lot of places are facing hard times as a result, not just GameStop.
Anyway, as always, feel free to leave a comment letting us know your thoughts. Do you think GameStop will be able to survive this transitional period or are its days numbered?
Thanks, Games Industry.
